In a disturbing move that caused an eruption among self-published authors, Amazon’s ACX division has announced a reduction and simplification of royalty rates. Rates that previously started at 50% and escalated to 90% have been reduced to a flat 40%. All of these rates were for their exclusive agreements, which kept audiobooks at Audible, Amazon, and iTunes. These royalties are often split between the author and the voice actor (VA).

The barrier to entry is high for self-publishing audiobooks. If the VA is paid upfront, costs can exceed $3,000 for a professionally voiced work of 100,000 words. Another way to produce works through ACX involves the VA doing the work for free in exchange for half the royalties received for each sale. A reduction of royalties means it will take longer for the author to pay back the VA in the first case and makes the risk of performing for free much greater in the second case.

The result of this will inevitably be less participation in the ACX program. 40% is an odd rate, in my opinion, as authors and VAs are delivering a final product that only needs distribution. The letter announcing the royalty rate points out that the 40% is greater than what most publishers pay, but those publishers also fund the recording and handle all QA and production duties. A fairer move would have been to get rid of escalators and move to a flat 60% royalty rate. Given the higher bandwidth needs of audio, matching the 70% of KDP seems unlikely, but 50% should be the bare minimum for distribution costs. Bookstores take less than this to store and sell physical books.

The other wrinkle here is the doubling of the bounty for new customers who sign up for ACX. For top-name authors, these bounties can add up to more than what they earn from royalties. Expanding the bounty program ensures that the rich will get richer while the self-published ACX authors hoping for more visibility will be left out in the cold. Rather than making up for the reduced royalty rate, the extra bounty adds insult to injury.

It remains to be seen what the result of the reduced rate will be. Will more authors who already use iTunes Producer to upload e-books do the same for their audiobooks? Will the third type of ACX production — author-recorded — become the new defacto? And will that result in a drop in quality? Will VAs stop auditioning for as many jobs, now that earning out will be more difficult? Will a new distributor emerge, and how will they match Audible’s current distribution network? Will ACX go global in order to make up for the drop in participation by casting a wider net worldwide? Or will the backlash and fears of KDP or CreateSpace following suit with their own reduced royalties cause Amazon and ACX to do an about-face and raise the flate rate to a more reasonable 50% or 60%?

Time will tell. There will certainly be repercussions. Personally, I’m shocked that Amazon would do anything to fuel the speculation that once they grow big enough, authors will suffer. Whatever margins they hope to improve by this 10% move can’t possibly be enough to cover the damage they’ve caused in public relations or the power they’ve granted to their detractors.


58 Responses to “ACX Lowers Royalty Rates”

  1. This move makes me sad. The production costs of the audio book I just released were significant and paid entirely by me. Now future books in the series will take longer to recoup my expenses before turning a profit.

    I’m committed because the math still works in my favor, but for indie publisher not even going 50-50 seems like a bad deal.

  2. Hugh, I could not agree with you more. Especially your last sentence.

    This move is appalling, so unlike the long-term thinking and author-friendly environment we have experienced from Kindle Direct Publishing and Createspace. Overnight, Amazon has lost the good will of audiobook narrators, and alarmed many KDP/Createspace authors about their future with those Amazon entities. While I made money on my first audiobook, I cannot imagine risking an investment in future titles under these terms — especially when Audible.com retains (and often exercises) the unilateral right to slash the sale price of audiobooks at will. It is impossible, even for those of us with books that sell well, to project future earnings in such an arbitrary decision-making environment.

    I’m shocked at this such un-Amazon-like behavior from an Amazon company.

  3. Ann Christy says:

    Great post, Hugh. You’ve hit the nail on the head and even been generous in your words.

    What I’m having a hard time understanding is why the distributor of digital…non-physical…goods who do no part of the creating, recording, editing or QA in a project, but merely receive the non-physical goods and then transfer said good, should get more than a delivery fee in the first place?

    • Ann, I’m not sure I can justify “more than 50%” but they obviously have huge overheads in storage and fees for bandwidth to support these files. Not to mention programmers, and technical people and customer service. Just because there is no physical product doesn’t mean there are not substantial costs involved.

  4. My thoughts:

    I can only speculate that this will result in fewer books being produced. Few talented narrators will gamble on a royalty share when there’s no higher percentage rate to win, and few authors can afford to gamble on high production costs that result in a 40% royalty rate.

    On the other hand, the market is rife for a new distributor to rise and challenge ACX; when Apple opened its iBookstore to indies, Amazon raised its ebook royalty rates from 35% to 70%.

    I can say that while I personally have a few books currently in production that will be grandfathered in under the old rates, I am unsure as to whether I can afford to produce new ones. It doesn’t look like it, but we’ll see what the future holds.

  5. I’d also like to point out that they aren’t expanding the bounty program. It used to be that the first three first-downloads got you $25, for a total potential of $75. Now we get one $50 bounty.

    • Hugh Howey says:

      Good catch. I hadn’t realized that.

      • Milton Bagby says:

        Audible encourages narrators and producers to promote new memberships and be rewarded as a result. Please! How many times can you ask your parents to subscribe to Audible? It works both ways. I did an audiobook that wound up being a required text, which forced students to join Audible–new memberships which I had no part in promoting.

  6. Lee Strayer says:

    I saw that you took notice of this at kboards, as did I, and I greatly appreciate you using your larger standing in this community to shine more light on this.

    I was one of the people laughing at Amazon-doomsayers not six months ago when they started talking about the eventual skewering all the indies would eventually take when Amazon inevitably went after their ebook royalties. “Hah,” I said. “What would a company the size of Amazon gain from going after the royalties of the very people who made it cool to own a Kindle?”

    After all, Amazon’s typically vague year-end reporting on earnings states that ALL media sales (which would include their rapidly growing Instant Video unit and their well-established mp3 store as well as ALL books, not just indie ebooks) only accounted for HALF the balance sheet. By keeping new content flowing to those Kindles, not only does Amazon keep the high-profit digital media sales going, but it keeps a digital Amazon catalog in those same customers’ hands that much longer, keeping anything Amazon sells just a click away.

    But then there was the announcement a few weeks ago that Amazon was going to raise the $79 Prime membership fee to as much as $129, and I started to get worried. Still, though, I thought they wouldn’t risk the backlash they would receive from going after the entrepreneurial self-publishing community.

    Now comes this announcement from Audible, whom Amazon has mysteriously kept at arm’s length ever since acquiring them in 2008, of a draconian bite out of the independent publishing marketplace they established three years ago. So is money really tight at Amazon, or is something else going on?

    As you accurately point out, the royalty structure already seemed fairly scant, given that the incremental costs of adding a listing to their catalog are virtually nil. In addition, they have been working with Amazon recently to drastically cut prices on many indie audio titles on Amazon when purchased with an ebook, often times making the price of adding an audiobook version to a Kindle book purchase less than the royalty that I, as a narrator, should have made from a sale on Audible! If money were the concern, then I would assume that this wouldn’t be going on.

    If money isn’t the concern, then there are two possibilities that I can see. If I give Audible the benefit of the doubt, then I would say they are trying to offset the bad stipend payment choices they have made over the past year by taking that money out of royalties. Those stipends are $100 per-finished-hour payments made to narrators to encourage them to take royalty-share deals on books that Audible has determined through some incantation are going to be money makers despite the authors not being able to pay for production. Many times this has enabled great indie books to get narrators that they normally wouldn’t have gotten, but many other times these payments have gone to back books that haven’t sold well at all. This has undoubtedly left Audible with red ink to contend with, and as I said before, Amazon has never really taken this company into the fold as it should have.

    The other possibility is that this has all been a scouting expedition. Audible has their own publishing imprint called Audible Frontiers, where they have aggressively been going after top indie books and signing them to contracts with traditional publishing advances. They may have simply been using ACX as a means to see if they had missed anything in the process, and having satisfied themselves that they have a good system in place to scoop up the profitable new authors and genres, they’re cutting back their involvement with the indie publishing space.

    I almost wish one of those two scenarios would be the actual reason, but unfortunately, I now feel in my gut that this may really only be a trial balloon for what Amazon really wants to do with their indie publishers across the board. With Nook effectively crushed, B&N looking at a possible hostile takeover, and no other viable alternative except Apple (who has to deal with their own anti-trust problems), Amazon may be feeling their oats a bit in the indie space.

    What better place to get a taste of what the push back might be like than to kick some sand in the faces of indie audio publishers where they can deny any involvement over on Audible’s beach?

    Makes me a bit sad all the way around, but at the same time, maybe this will get everyone thinking about the many other ways they could and should be taking advantage of to reach the audience they’ve developed. Having a few high-profile indies like you keep the light focused on this will help greatly.

  7. Travis Hill says:

    While this is a bad move on ACX/Amazon’s part, this is the 21st century. In the modern age of the internet, think of how many inventive minds have changed the face of our daily lives. There are millions of Jeff Bezos, Bill Gates, Steve Jobs, and all of the other names that people don’t really know as well but have created powerhouse websites and smartphone apps that we interact with daily.

    The people who gave us Napster, Facebook, Tumblr, hell, even Minecraft, these are the types of innovators that hopefully will see this as a perfect opportunity to enter the fray. It might take venture capital and tens of millions of dollars to put a system in place to market and distribute audio books while still treating authors and audio producers like valued partners.

    It also might only take one savvy individual a few weeks to create an app/site with a cloud or even a new P2P distribution method tied to a shopping cart, giving authors/producers the ability to arrange the same type of royalty-sharing deals AND a storefront / distribution outlet.

    Amazon might control the overwhelming share of the audio book distribution and sales market, but if an innovator gives indie/self-pub authors a viable alternative, and we all move to that platform, it will take some time, but other authors, even publishers, will eventually begin sniffing around (while those early adopters have pioneered the new alternative’s development and promotion as they are earning royalties).

    Basically, instead of worrying too much about Amazon/ACX (though we should be a unified, strong voice, authors and producers alike, to try and get this decision reversed, or at least modified to not be so insulting to us), we should put the buzz out that as a fairly large group that has the potential to earn a lot of money, we’re looking for some tech-savvy entrepreneur to partner with and give everyone another choice.

  8. It really comes down to a question of trust.

    Trust is fragile, and requires a leap of faith when those required to trust are small, relatively helpless, and at the mercy of the large entity they trust.

    Trust is very hard to build, and extremely easy to lose. And once lost, it can never truly be recovered.

    It’s a sad day for a lot of reasons.

  9. Becca Mills says:

    I’ve shelved my plans for audiobooks. What I thought was a great program now doesn’t seem worth the trouble.

  10. Mark E. Cooper says:

    I recently invested heavily in audio over at ACX and I’m appalled by their decision to attack narrators especially. This can only have the effect of reducing indie audio book quality and overall numbers produced.

    Authors will be forced to lower their offers in order to cover production costs. My books on average cost in excess of $4000 to create. To cover the new reality I would have to cut that cost by at least $1000 to make new audio books. 2014-2015 was going to be my time to expand into audio, but now I think it will end with 2014 (as I am already locked in to 8 deals)

    I cannot see how I can justify more money thrown to ACX. Perhaps going direct to my narrator and having him master books to CD is an option, and perhaps using iTunes Connect to go direct to Apple could work, but I see this move as a shot across the bows. This is the beginning of a trend I feel the aim of which appears to be an attempt to put “us” back in our box.

    Mark

  11. I’ve been approached to make audiobooks of my Amsterdam Assassin Series, since there are blind readers who would enjoy my fiction due to the blind protagonist. However, with these fees and royalty rates, I wouldn’t be able to afford turning my books into audio books.

  12. In my talks with my narrators, it’s clear this will hurt both sides of the creative package, narrators and authors.

    Neither side, myself included as a writer, will have as much incentive to create new audio books.

    Either Amazon has some ideas in mind it’s keeping secret for now (that would help the audio market and those who create for it), or maybe the rising popularity of the market is drawing in a potent competitor.

    Either way, I’m glad I found this site (via a link on KBoards).

  13. Drew Smith says:

    This is a horrible move by ACX. Their rate structure already wasn’t setting the world on fire. Now they’ve made it downright unappealing. I especially enjoyed how they seem to think this crappy new rate structure will bring in new authors in droves.

    On the bright side, it has seriously cleared up my schedule since putting her books out in audio was on my 2014 to-do list. Now we’ve talked about this new situation and decided that the rewards don’t look tempting enough especially when you consider that you’re still locked in to a seven year commitment.

  14. So much for me ever using ACX. I’d been planning to release audiobooks as soon as I’m able to afford them, but recently I figured I might try ACX’s royalty share programs, just to see what happens from a title or two. No longer. This is the sort of dick move that will induce me to not do business with a company. I think I may just use a different distributor after all, because f&%k them, that’s why.

  15. Claire says:

    You know, this kind of thing causes me to reconsider my original plan, which was to sell my books myself. Indie authors make their own products. Not only that, they market their own products too. Sticking a book on Amazon doesn’t make it sell. You need to promote it too. We all know this.

    I often wonder why we give any company so much credit for what we do ourselves. Amazon are suppliers. They supply us with distribution, and that’s great. But I can distribute e-books and audio books worldwide on my own website with woocommerce and paypal latched onto it. Sure, I don’t have an ereader, but readers can download Aldiko into their smart phones for free and make their phone into an e-reader for not cost at all.

    Distribution in book stores are great if you’re generating readers from there, but if you’re generating your readers from say BookBub or somewhere similar, does it make a diff if your reader buys the book from Amazon or your own website?

    I guess, if Amazon does raise it’s royalty and let us all down, I’ll just market to my own website. I pay nothing to distribute my books there, and I have total control over it. No one can ever take my website away from me or my readers.

    My advice is make your website into the go-to place for your readers. Then if Amazon drops a bombshell somewhere down the line, it won’t effect your business. Promote your website. That’s the one that matters to your business.

    If people want to truly control their own books, then group together and create an ebook platform for readers that individual authors can sell via their own site on. Kind of like a search engine but just for bookselling websites. Readers can find all books together in a fair algorithm based list, and but from the individual sellers, with maybe a 10%-30% fee for the running of the system.

    That’s all Amazon is really, but it takes control and money from each vendor for doing it. While I don’t grumble at 30% for some online administration (archiving to some extent). I won’t be sticking around if they charge more than that. I don’t like some of their policies and systems that allow for criminal activity, which could be improved upon. Amazon is the biggest bookseller because it has the largest community. Who do you think makes up that community? Authors and readers.

    Authors aren’t powerless. They just need to work together with a fair system in place. If Amazon stops providing that, then we just need to build our own. We need a democracy, not a private company making the rules.

  16. Claire, I’ve done that before and I’m doing it again. However, the biggest barrier, even if you’re an author like JK Rowlings, is the device issue. Readers just love the ease of getting things on their device without effort.

    That’s a big hurdle.

    • Claire says:

      Yeah, the delivery system is a problem. Syncing a book across all platforms would be difficult without the same app software on all platforms. But then, if you’re hosting all the books on an Adobe server, you can incorporate updates, syncing and DRM if you want to (I think). The problem with the Adobe content server is that is costs 10 grand. Although, I did find a site that rented out hosting space for ebooks on an adobe server. It was 5 books for $30 a month.

      One system that I’m interested in is subscription. Rather than deliver a file, I’d have an multiple online e-books that could be accessed via a small monthly subscription. That way readers can read what they want, when they want. The files all stay on my server, and users just login to their account to read the books. I get paid, the readers get books as they come out and there’s no faffing around. I can create my own mobile site for it that will work on any device, all the user needs to do is login and start reading. Basically, Netflix for books.

      But hopefully Amazon will remain the place to be for ebooks, but if they get a bit greedy, I’m sure someone will fill their place in the market. I’m not too worried really because there are so many companies vying for the Amazon pie on book sales. If Amazon drops the indies, I think Google or a similar company would make a play for the indies instead.

      I actually don’t think Amazon will lower their ebook royalties. The change in Audiobooks could be down to something as simple as the partner company for audiobooks demanding a larger share.

      But it never hurts to be prepared to go full indie. This business changes pretty fast, so being independent of all external systems is the best backup plan.

      • Where is your website? I am interested in your ideas.

        Heather
        wordwan

        • Claire says:

          Hi Heather,

          My website is http://www.claire-chilton.com, but I haven’t setup my Netflix for books idea yet. I’m still working on the mobile site and building more a back list. I don’t think it’ll sell with my current meager offerings :p. I’ve used the rented Adobe server on my store though. It was very easy to setup and worked really nicely.

      • Netflix for books? Netflix has lots of blockbuster movies and stuff. Thousands I think. How many books do you have, Claire? And do you have some big hits that are going to lure people over to this site? Even some indie big hits? Just throwing self published work up online on this site isn’t going to generate too much IMO. I’m playing Devil’s advocate & thinking like a business person. How can content creators make money with this Netflix system?

        • Claire Chilton says:

          It was a backup plan for if it came down to no more indie books in relation to the topic of discussion, which was ‘what happens if Amazon starts taking all our royalties’. I honestly don’t see that event ever happening. However, on the subject of a Netflix-style subscription service for books, the companies already exist. Various online retailers are already selling thousands of books on a subscription basis to their readers, which are inviting indie authors to join them at the moment.

          On my books, I have over 7k fans, who happily read everything I write, which is a blessing. So to be honest, I wouldn’t need anymore marketing than my name. I could probably keep my subscription insanely low, and still make a profit on it.

          As for content, I write across three age groups and several genres. I write on average 10 books per year, and I’ve been writing for twenty years. I’ve got 200 stories in a filing cabinet, waiting for me to edit them and get them out. I think in my case, I’d be fine doing it on my own. I’ve got a large enough fan base and a broad enough range of stories to keep my subscribers happy.

          But, there’s no rush, and as I said, it was just backup plan idea for the worst case scenario that I was looking as as a business model. I don’t think my personal plans would suit everyone. They may not even suit me, but it doesn’t mean I won’t try things on my own website to see what works and what doesn’t.

  17. Here’s another writer who was touting their service until they did this. I got the last of my story collections up for sale in January, and have been promoting the dickens out of them- even did a guest post about it on the Maine Crime Writers blog. But now I’ll warn people away from Audible and ACX, and tell them to wait for the inevitable competitior program. My series novels will instead go to whoever comes up with a viable alternative. They’ve really shot themselves in the foot by blowing away their loyal patrons. Way to lose their base and give the opposition ammo. They’ve killed their golden goose in the effort to get another egg or two.

  18. McVickers says:

    I personally would like to thank Amazon and ACX for making me realize just what a fool I’ve been to put all my eggs in one place. My Select period is coming up and I won’t be enrolling any of my books in with Amazon again. Giving them exclusivity, despite all the benefits of borrows, etc, is just not worth putting your career in one mega giant’s hands. Diversify, people. Diversify, diversify, diversify.

  19. I just cancelled my Audible membership because I want no part in Amazon’s money grab whatsoever.

    What I can tell you is 40% royalties are not worth staying exclusive to Amazon. When my new audiobook comes out, I don’t know that I even want to distribute on Audible at all. 25% royalties for non-exclusive distribution doesn’t seem worth it, either.

  20. Michael Coorlim said:

    “On the other hand, the market is rife for a new distributor to rise and challenge ACX; when Apple opened its iBookstore to indies, Amazon raised its ebook royalty rates from 35% to 70%.”

    and Lee Strayer said:

    In addition, they have been working with Amazon recently to drastically cut prices on many indie audio titles on Amazon when purchased with an ebook, often times making the price of adding an audiobook version to a Kindle book purchase less than the royalty that I, as a narrator, should have made from a sale on Audible! If money were the concern, then I would assume that this wouldn’t be going on.

    +++

    I’m sure there are other reasons I’m unaware of as to why Amazon raised its royalty rates back then, per Michael’s comment, but it does seem possible they did it to combat a new competitor.

    Couldn’t this be a similar move?

    To top Lee’s comment off, there’s Matchbook, isn’t there? Doesn’t this just sound like prices are being streamlined from one company to another? Don’t Indie authors have Audible books AND Amazon books for sale?

    In fact, do I see the two situations dovetailing?

    Yet, how odd, as I read a slew of other comments, per Chuck Wendig’s pronouncement about cars as lemons and better cars being taken off the market, and shit volcanos, I now see a bunch of writers jumping Amazon’s ship. Yes, I said Amazon–they own this company, don’t they?

    I just happened to arrive at all this when Amazon bought Goodreads. Maybe I wasn’t so busy doing something to notice what seemed to be happening from the time I arrived. I dunno. Your mileage is obviously varying. I keep getting different feedback from others having current direct experience.

    I think I need a programme. I am getting confused by this groupmind think.

    And man, what’s this this CAPTCHA code thing? Yeesh!

    Thanks

  21. The fact that the rates changed didn’t surprise me…to be honest the fact that they paid up to 90% to the author was the big surprise. It was obvious that the initial rates were very attractive to get the program running – and it did….big time.

    I agree with Hugh that due the higher demand related to storage and bandwidth, matching 70% probably isn’t realistic. But 40% does seem too low. I do think that 60% or 50% would be a more reasonable sharing of income.

    All that being said 40% is still much more than what I get from my traditional contracts that insisted in keeping the audio rights and taking 50% because it is a subsidiary. I do hope Amazon will reconsider the rate and up by 10% or 20%. But of course who doesn’t want more?

    • Ken Hagdal says:

      “I agree with Hugh that due the higher demand related to storage and bandwidth, matching 70% probably isn’t realistic.”

      That’s the only point I don’t agree with. The rate for Digital music on Amazon is 70%. Given the bit rate difference, a 10 hour audiobook takes up less than 2.5 times the space of 45 min album. Then, we have to factor in the fact the that price of an audiobook is -coincidentally- about 2.5 times that of an album. So, if the pricing model is financially viable for music, it would be for audiobooks.

      And for the record, the royalty share for digital music is 85% on bandcamp and 90% on CDbaby.

  22. William ash says:

    It might be useful to point out that Audible is the sole distributor of audiobooks to the iTunes store. iTunes producers cannot upload audiobooks. You cannot upload to ACX unless you have the original book on Amazon first–Audible will not take a book only in the iBookstore. Amazon has made a very quiet monopoly on audiobooks. Audible also sets the price of the audiobook and so it is really 40% of whatever they want to give you.

    About the old ACX rates, which were based on the number of books sold. You start at 50%. If you can sell something like 25,000 audiobooks, then you can get the 90% rate.

    • Pia Sparks says:

      I just thought I’d mention that you can put an audiobook on iTunes via CDBaby’s digital distribution package. They take 9% (after whatever iTunes takes). Their digital distribution is quite interesting. It goes on Amazon and so many other places. I’ve used it for music and have made some money that way, and always thought I’d just record my own audiobook and pay the $49 for digital distribution and go that way.

  23. William ash says:

    Amazon has not been particularly generous to traditional publishers, I am unsure why they would be generous to self publishers. I think their cornering the audiobook market has been very smart for them. Basically, they control Amazon, Audible, and iTunes. It will be very hard for someone else to compete, especially if you want global distribution.

    The other side of the coin is that Audible is a financial disaster and they need to change the rates to survive. But I don’t think so.

    But the bounty program is brilliant if you think about it. First, you get the author to take all the risk in the production, then you have the authors work for free to promote Audible and drive customers there. You have this wonderful class of unpaid workers promoting their company. It does not matter if your audiobook is bad, those customers might buy other books. And Amazon knows that authors are are always selling and pushing their titles. And like I said, it does not matter if the author has the sale, they just are going to cultivate that customer into a buyer.

    • Well that’s what “authors” have always been ( and writers). Unpaid workers. Everybody (publishers, editors, agents) seems to be able to make a living off of authors works except authors just traditionally can’t seem to.

  24. Data Guy says:

    Not cool, Amazon.

    Not cool.

  25. Andy Halmay says:

    I wrote and published five books in 2013, the year I registered Veni Vici Books. I’m a U.S. and Canadian citizen living in Canada but have been barred by B&N because I file my IRS taxes out of Canada. I doubt that this hurt me because I’m not burning up the track at Amazon and B&N probably represents a minuscule percentage of Amazon. I started life as a performer, did my first network radio drama with the late Leslie Nielsen and recorded my first radio commercial with Monty Hall – long after getting out of radio, during a career on Madison Avenue as a writer and producer, I recorded an introduction of the Pope on CBS or NBC TV Network – so if I produced an audio book today, I’d have my favorite voice for free and would look at only a time investment when it came to voicing – but I haven’t seen any numbers that would convince me the effort would pay off. I did look at ACX last year and got the impression they had an attitudinal problem. I’ve kept cheerful throughout life by avoiding folks with the wrong attitude. If, indeed, this price increase is a burden or is grossly unfair, and if there is a worthwhile market, why not a form a co-op funded by major and minor and self-publishers to provide the same service for themselves. I can assure you, if you produced product for which there is a market, Amazon will happily deal with you even though you shunned ACX. Jeff Bazos is not on top of every minute aspect of his empire – he sometimes picks up the wrong people or buys the wrong companies, but he is a businessman, primarily a retailer, and good retailers never reject products that can bring them profits.

  26. Part of me wonders if Amazon has been running at a loss on ACX up until now, just to get it going. And maybe this move is to start to change that. I mean that is what they have done historically. It seems like people swallowed it in the past, so why wouldn’t they try it again.

    I am not sure how it all works, so I may be wrong, but the impression I get from your blog post here is that once the audiobook is produced the author is obligated to “pay back” the VA a specific amount, which is done through the royalties. This raised a question in my head. Of course the VA has put their time and effort into producing your eBook and they, like any professional, deserve to be compensated for that. The same can be said of our cover artists, our editors, our book designers. Everyone deserve to be paid the exact amount they deserve for every hour they poured into our book–except us. LOL.

    I know that is the choice we make by becoming authors, especially self-published authors. We aren’t “professionals” who get compensated for their work. At worst we are retailers, investing in inventory and hoping it will sell. At best we are artists, dedicating our lives to creating something beautiful.

    Amazon is not our benefactor, our patron, or our friend. It is important to always stay aware of that. And it is important to always stay aware of how much power we give Amazon. If this change from Amazon today just bankrupted a couple of authors, or even made it suddenly difficult to pay their rent, then they were giving too much power to Amazon.

    Contrary to what many people say, I don’t believe there is anything wrong with a business trying to dominate a market and make money. I’m a business person myself. I want to dominate my market too. So how can I fault Amazon just because they are big and I am little? So I won’t shout and kick at them for this change. I will just take note. I will sit back, look at the landscape of publishing before me, and think about how I can proceed without putting all my eggs in Amazon’s basket.

  27. walter daniels says:

    My guess is that ACX hired some cast off (failed upward) idiot form the “Big 5″ publishing world. The “Big 5″ publishing world is killing itself, with similar stupidity. It’s now a question, of will ACX get hit with an anti-trust lawsuit, or die to a competitor first. If Amazon isn’t stupid enough to hire another another physical publishing failure, and kill their Kindle author rep., they may keep their business. Kindle *needs* the Indie author, more than we need them. The “Big 5″ publishers can’t begin to supply the Kindle market, with the necessary product.

  28. Kathy Golden says:

    Personally, I’ve never seen the royalty split as being fair to narrators. Promotion of a book to the degree that it becomes visible enough to generate enough income to pay them is a daunting endeavor.

    Does Audible help with the book’s promotion? Out of all the emails I’ve received from Audible about new releases, I have yet to see the promotion of a new book produced by an unknown indie author. I also signed up for the Audible Daily Deals, and I haven’t seen a fiction book by an indie author advertised in those deals.

    Moreover, because of the Whyspersynced deals and because authors have no control over any of the discounts that Audible offers its customers, no business strategy, based on sales, can be implemented to ensure that narrators participating in royalty agreements will be paid within any reasonable timeline.

    In light of these facts, I can only wonder as to the amount of narrators finally receiving the payment due them under these agreements. I’ve always felt there should be a clause in those kinds of contracts that require authors to make monthly installments to narrators when those authors’ books do not generate enough income equivalent to a twelve- or twenty-four-month installment amount.

    As for exclusivity, authors can still use ACX and not limit the availability of their audiobooks’ distribution to Audible.

    While 40% royalty might be higher than what traditional publishers and other audiobook publishers are offering, knowing that the price of the book could drop to $1.99 or even 99 cents as part of a Whyspersynced deal should play a major factor in authors’ decisions to market their books exclusively through Audible.

    Authors, seeking to create audiobooks, should take these factors into account and design their own plan. Budget to pay for audiobooks outright in order to take advantage of the high-quality narration and then retain the rights to market them through different distributors. In addition, sell them yourself from your website, and if you know your audience is willing to buy them, you can create CD packages,

    The ACX platform provides access to professional narrators and a procedure designed to encourage that authors and narrators work together to produce the desired final product. All things considered, it is up to authors to work with those narrators in a way that is financially fair to all parties. Authors can then take their audiobooks and determine the best possible options for selling them.

  29. Ann Christy says:

    Hugh – I’ve been following the news fairly closely looking to see if there is anything more forthcoming on why Amazon/ACX did what they did but I’m seeing nada. I did see the ACX blog which featured you at a recent event and I wondered if you had any new insight into this.

    I ran the numbers and while everyone keeps touting that 40% is still more than traditional publishers, they are conveniently leaving out that all productions costs are on the author, which isn’t true when you do a trad pub for audio. Ditto with promotion, etc.

    In the end, unless it is a big seller, and by big I mean huge in terms of audiobooks, there’s very little chance of a “win” in any reasonable amount of time for the indies.

    While this may be old news by now, it still rankles me because I don’t have an answer that makes sense, other than ACX purposely turning into the worst kind of vanity press: take a bunch of money for nothing. I can’t believe that would be true. Any news?

  30. Robin says:

    ACX was destined to fail given the history of audiobook marketing. Defunct companies like Dove Publishing and MediaBay all sank considerable capital attempting to grow the small audiobook market.

    I suspect this new royalty reduction is an attempt by ACX to stop the bleeding, but has only made for a quicker death.

    Has anyone noticed that ACX now calls itself, “An Amazon Platform”, changing from, “An Amazon Company”?

  31. James Tonn says:

    As an audiobook publisher, I can offer some insight as to what is going on in the audiobook industry – namely, why ACX was created and why it changed recently.

    By the way, we love this site and the AuthorEarnings initiative. We’ve been happy to be a fly on the wall, love the detail of the reports and plan to throw an Author Earnings logo on our site to show our solidarity. So I’ll try to give back to the community a little here:

    WHY WAS ACX CREATED?
    1) AUDIBLE NEEDED CONTENT AND MARKET SHARE – QUICKLY. Audible’s subscription model is all about keeping subscribers satiated and happy with lots of great fresh content. But, over the last 5 years, the whole audiobook industry has grown an average of 12%, and so the subscription base grew much quicker than the content was flowing in. In 2011 and 2012, Audible was outsourcing the production of hundreds of back-list titles, but listeners didn’t want old stuff, though Audible could brag it was adding tons of new titles.

    So they changed their strategy. ACX enabled Audible to double their annual new titles in 2013 – For FREE, well, without any upfront investment.

    Exclusivity to Audible for downloads, including not being allowed to make physical audiobook editions helped grow market share by starving competing retailers. Bounties were also created to help ebook authors bring all their buddies (their ebook buying readers) into Audible’s subscription fold.

    2) ACX WAS AN EXPERIMENT. The royalty rates were crazy enough to get the indie ebook authors interested and even convince a few traditional authors (Dave Ramsey, Dr. Phil, etc.) to try out ACX. The rates were experimental, as the whole platform was. This is also the reason ACX was not released anywhere but the US. If it was unsuccessful then they would have shut the whole thing down.

    SO, WHY DID THEY CHANGE THEIR ROYALTY RATES AND BOUNTY?
    3) ACX WAS OFFERING UNSUSTAINABLE RATES. Remember, best-selling authors could threaten Audible Studios’ acquisitions people saying they would grab a mic and head on over to ACX and make 90%. Note: Starbucks would target a successful indie cafe by planting a store up the street and down the street from it. Once the indie store went bankrupt, they would get rid of the extra Starbucks and own the street. ACX was directly competing with Audible Studios at the same time as hurting the competition, which had to be curtailed at some point.

    Bonus #4) HORRIBLE CONTENT DELUGED AUDIBLE’S SUBSCRIBERS. Granted, the great stuff floated to the top, but in a well manicured (too well manicured I agree), well curated service, anything was suddenly allowed on the shelf. Production that made long-time listeners cringe, inexperienced voice-over “actors” began destroying books – good and bad alike. (To an audio publisher, this is the same level of horror as seeing someone lighting a book on fire.)

    For us, as an audiobook publisher, we were not surprised by the ACX royalty change. Understanding why ACX was created, really will help inform your interpretation of each change that happens. And there will be more.

    So, sorry about the rant. I should say that we are huge fan’s of Don Katz (Audible), and Jeff Bezos (Amazon), and at the Audies Gala I was just telling the ACX Marketing Manager, how much we admire Amazon’s democratization of publishing that has enabled the uprising of indie authors. Publisher’s like us wouldn’t be able to thrive without a level playing field.

    We also believe strongly that in the future – audiobooks will be the primary source of income for authors, especially well-positioned Indies with a strong online platform. So this discussion is a good one to have on this site. Thanks all,
    James

  32. Denis says:

    I see a lot of interesting content on your website. You have to spend a lot of time
    writing, i know how to save you a lot of time, there is
    a tool that creates unique, google friendly posts in couple of
    seconds, just type in google – laranita’s free content source

  33. Annmarie says:

    It’s hard to find your blog in google. I found it on 11 spot, you should build quality backlinks
    , it will help you to increase traffic. I know how
    to help you, just search in google – k2 seo tips and tricks

  34. Nick says:

    I am an experienced actor and have gotten three audiobook narrations on the Amazon/Audible market in June 2014. These were produced through ACX and are royalty-share deals. When I did not get a royalty payment during the first week of July, as I had been led to expect, I made some inquiries and found that the author of two of my audiobooks got a direct deposit on June 18th with no accounting. Meanwhile, after contacting ACX a couple of times, they finally sent me an email stating that I will not receive royalties for June sales until the end of July. That to me does not seem reasonable, that I should have to wait as long as two months for my pay. What is ACX doing? They have never been forthcoming with information concerning royalty payments. What is everyone’s experience with, or opinion on, this?

  35. Caryl says:

    It is hard to believe that Amazon could be a party to any of this abuse. I have always had nothing but the highest regard for anything with the Amazon name but now through awareness of the audio book scandal I am losing respect for them as I am sure others are. I really do think at this point with all of the abuse of authors and voice actors at the hand of ACX and Audible that Amazon has to do something notable to remedy this situation or their reputation will suffer beyond repair and I for one will never do business of any type with them again. I think also it will lead to mega lawsuits.

  36. Scott says:

    I just discovered the ACX program for the first time and eventually made my way to this thread. I have to say, these are someone the most well written comments I have ever seen online! It was a pleasure to read through author comments :)

  37. Brian says:

    I’d like to offer my own experience so far working as a narrator on ACX since pretty early on (late 2011).

    While I’m thrilled at the chance for expanded work opportunities and income, the quality of titles available on ACX has dropped far since the beginning. Since rights holders can easily set up their works as projects on ACX, often we get flooded with short books that are poorly written or edited (usually the latter).

    Rights holders also occasionally drop off the radar, leaving their projects in limbo. One of my earliest bookings was a children’s book. It was originally contracted for a quick three-day turnaround for me to finish. Not a big deal, since it was very short. It took six months for the publisher to get me the manuscript. I jumped right on it when I got it; however; it was a poorly assembled collection of public domain fairy tales, poorly typed out and with almost no editing. I ended up cleaning it up as I recorded it, making sure the sentences actually made sense in the recording. I sent the finished files the next day, with an additional offer to serve as editor for the book itself. Another four months went by and no response to multiple checks. Even the website of the company was gone. Eventually I had to call ACX and have the project cancelled. This was not a huge time investment, but it has made me cautious.

    On a second point, the vast majority of titles available to work on are Royalty Share projects. As of this morning (11/2/2014), out of 5,730 titles, 5,494 are Royalty Share projects. This is either exclusively RS or listed as either RS or PFH (flat rate), which generally means RS in the end, anyway. This is good for rights holders since it reduces their upfront production costs to near zero, but narrators often have to serve as the audio engineer on their work as well, which increases the amount of time spent on the project.

    Let me give you some numbers as an example. I’m currently narrating/producing a nonfiction title on a Royalty contract that has an estimated length of 13 hours. Generally, we spending about 1.5 – 2 hours in the booth to record every finished hour of audio. So that’s up to 26 hours for recording. Then, since we usually can’t afford an engineer to edit/master this stuff for us, we have to do it ourselves. At a time value of about 3-4 hours for every finished hour, that’s up to an additional 104 man hours for a total of 130 hours of work.

    With a Royalty Share deal, it’s a huge risk because there’s no guarantee it’s going to sell. Just like you folks, I’m not a multinational publishing conglomerate that can absorb the loss. I’m a professional actor, so I’m struggling to make ends meet and this is one avenue for me. If I was looking at a $2000-3000 paycheck for this example book as a PFH project, I could devote every waking hour to crank the finished book out in a couple of weeks. I might even consider it on a Royalty Share if I knew the book was going to sell. But, again like you, I’ve got those pesky obligations like food/rent/what have you, and they don’t accept getting paid on Net 30 terms.

    Why do I do this to myself at all? I will never reject a Royalty Share offer for two major reasons. First, I generally only audition for titles that interest me, whether it’s from educational value or just entertainment. It’s the best way to stay engaged during the course of all that work. Second, *I don’t know what’s going to sell well*. If I had that knowledge, I’d be off running a movie studio or writing my own bestsellers or both in this multi-platform age we live in. Heck, my most recently published work was an audiobook on Linux (major challenge, but tons of fun) and it has in three months outsold every other book I’ve done combined. Not exactly a high hurdle, but still a nice surprise.

    For both rights holders and narrators, there are benefits and drawbacks to either contract. I’m not yet a member of SAG-AFTRA (the union), so I don’t have to worry that Royalty Share and lowball PFH projects won’t contribute to my pension or health insurance. (Union members can narrate any project, but P&H is only paid of PFH books of $200 per hour and higher.) For an author, I agree that paying a PFH contract could be painful, especially if it’s a long book. But that may end up a drop in the bucket over the 7-year contract that is the ACX standard, with no pesky sharing of royalties. We get hired to do a job, we do it and move on to the next job.

    It’s the classic dilemma: Good – Fast – Cheap — Pick Two. If you want quality work fast, it ain’t gonna be cheap. If you want quality work cheap, it ain’t gonna be fast. And if you want work done fast and cheap, it ain’t gonna be good.

    May you always choose quality first.

    • Ann Christy says:

      Brian, your paragraph describing your process, here:

      “Let me give you some numbers as an example. I’m currently narrating/producing a nonfiction title on a Royalty contract that has an estimated length of 13 hours. Generally, we spending about 1.5 – 2 hours in the booth to record every finished hour of audio. So that’s up to 26 hours for recording. Then, since we usually can’t afford an engineer to edit/master this stuff for us, we have to do it ourselves. At a time value of about 3-4 hours for every finished hour, that’s up to an additional 104 man hours for a total of 130 hours of work.”

      What that describes is exactly the process many authors have. Only take it out by a year. That 1.5 hours of studio work might represent a month of continuous all day labor and all the attendant fretting that goes with creating it. And ditto with many of them and affording editors, etc. (I outsource everything except the writing such as editing, covers, etc, but not everyone can do that yet).

      In essence, it’s a leap of faith for both the writer to create the work and the audio actor to interpret the work in audio. Glad you enjoy the work and keep it up!

  38. Jeff says:

    Hi, I am Jeff I am selling books in audible last couple of months My book removed from Audible Now my book Not available i not received my royality i contacted acx support through phone and Email they told my money locked by finance department Oct i received my royality Share from acx @ 23rd oct My last month due to date 23th-30th Nov But still Single penny Not received and Also No reply from Acx I contacted Several Times no proper Response from ACX
    Friends Can u give advise Whether my Book Active Again or not? and i receive my payout or not

    Thanks

  39. charlo says:

    I recently received an email from them encouraging authors to lower their ebook prices to $0.99!!!!! They reasoned that it’s digital so it should be nearly free.

    This is a precious move by Amazon.

    Hypocrites.

Leave a Reply